Does Global Financial Cycle Cause Business Cycle in Turkey? A Frequency Domain Analysis


MALIYE DERGISI, no.180, pp.345-362, 2021 (ESCI) identifier

  • Publication Type: Article / Article
  • Publication Date: 2021
  • Journal Name: MALIYE DERGISI
  • Journal Indexes: Emerging Sources Citation Index (ESCI), TR DİZİN (ULAKBİM)
  • Page Numbers: pp.345-362
  • Keywords: Global Financial Cycle, Business Cycle, Frequency Domain Causality Test, Turkey, CAUSALITY, SYNCHRONIZATION, CREDIT, MACROECONOMICS
  • Anadolu University Affiliated: No


The impact of financial factors on the real economy is increasing day by day. Accompanied with globalization, financial instabilities in central countries can quickly affect developing countries. The aim of this study is to analyze the potential impact of the global financial cycle on the business cycle in Turkey as a developing country. Traditional Granger causality and frequency domain causality tests are used to examine this relationship. The findings indicate the presence of a unidirectional causality relationship from the global financial cycle to the Turkey's business cycle. Global financial cycle affects the Turkey's business cycle in the medium and long term. Policy makers should consider global financial cycle in their policy choices for economic stability.